4 Risk Management Questions for a Changing Healthcare Economy
Insights posted on 6-14-2017 by Tammy Hawes
By its very nature, risk means exposure. It opens you up to potential dangers and pitfalls. So it’s not surprising that most healthcare executives have a pretty low tolerance for risk. After all, you’re working in a profession where human lives are on the line. A mistake can literally spell the difference between life and death.
But even beyond the concerns of patient safety, risk impacts healthcare in other ways as well, notably in areas of financial and operational efficiency. Heightened competition and a “survival of the fittest” mentality have deterred many leaders from taking even the most calculated risks in recent years.
The problem is, risk avoidance isn’t a strategy that can sustain healthcare organizations going forward. Ongoing volatility, continual market disruption and patients who are increasingly behaving more like consumers are forcing overly risk averse healthcare executives to shift their mindsets about risk—or get left behind in the modern healthcare economy.
So, how can you get more comfortable with risk-taking and create a culture where others are encouraged to take innovative steps in new directions? Here are four questions to consider:
1. How can taking risks help us achieve our mission and strategy?
By thinking of risk in the context of your strategic and mission-based guideposts, you can begin to open your mind up to possibilities you might otherwise be quick to shoot down. If there’s a compelling business or patient need to be served, you need to be open to all potential solutions, even if that means charting a different course than you’ve taken in the past.
2. What are the risks of not changing?
Change is always risky. It’s much easier to keep doing things “the way we’ve always done them.” But just because stasis is the easy option, that doesn’t mean it comes without risk. In an industry that’s changing by the day, is it really safer to stand still? Articulate the risks of the status quo, for yourself and others, and evaluate whether you can truly afford not to change.
3. What’s worked in other industries?
The most effective leaders are looking outside their insular worlds to understand how others are innovating their industries. Retailers, for example, are increasingly taking an “omnichannel” approach to business. The parallels to healthcare are clear. Digitally savvy patients are demanding more from their health providers, health networks are tasked with bringing more physicians into their groups and wearables have created opportunities for more connected and targeted preventative care.
A strategic use of technology can also enable healthcare organizations to try more innovative tactics while running their operations more efficiently. The point is, by looking at how another industry has already tested the waters, you can learn from their successes as well as their challenges.
4. Do we have a trusted advisor to guide us as we take this big step?
Knowledge is power, and the more information you have, the more comfortable you’ll be in taking bold new steps. This doesn’t mean you have to do all the work yourself. Look to partners and experts who can guide you and share the experiences of other organizations that have made similar moves. A good external partner can help you sidestep potential landmines while enabling you to take advantage of innovative new ideas and opportunities.
Taking risks is never easy. But the simple fact is, the modern healthcare environment requires it. You won’t be able to continue to achieve your cost, patient care and population health objectives without change. And you won’t be able to transform healthcare for the future without taking calculated risk.